Small change from the super-rich

Britain doesn't have anything like the billionaire philanthropy shown in Warren Buffet's mobilisation of the US super-rich.

However the Evening Standard has been making a little effort with its "Disposessed" fund.

The Standard is raising money from business leaders to ease "inequality" in London. The Standard Disposessed fund is a very small imitation of Buffet's charity drive. But like a small-scale model, it shows many of the same features. And not in a good way.

Andrew Carnegie is the model for Buffet, Bill Gates and their fellow US billionaire philanthropists. Carnegie, the Scots-American self-made plutocrat who gave away his massive fortune at the end of his life to fund libraries in the last quarter of his life, drew the blueprint for billionaire benevolence.

Carnegie made his money by owning the dominant US steel producer. After 1900 he enjoyed sharing his wealth at his leisure.

But he could be less generous when asked about fair shares before then. In 1892 steel workers at his plant in Homestead, Pennsylvania, asked for a wage rise that reflected Carnegie's 60 per cent rise in profits.

Carnegie's company locked the workers out, then called out 300 armed guards from the Pinkerton agency who shot dead seven strikers. Three Pinkertons were also killed in the battle.

Carnegie broke the strike and replaced all the strikers with migrant workers. So Carnegie's generosity was limited - he wanted to give on his terms, and would call out the gunmen when he faced demands to give on someone else's terms.

I am pretty sure that Gates hasn't had anyone shot recently, but the US context for philanthropy still follows a Carnegie model.

The billionaires' generosity happens in a mean social order where their riches lie on other people's poverty. Their philanthropy is linked to the growth of a super-rich elite within a low taxation nation with a weak welfare state.

The Standard's fundraising has some relation to this world. One of its larger donations - £100,000 - came from Pierre LaGrange.

He is a finance boss, founder of hedge fund GLG, and so a good representative of our new US-style super-rich.

The LaGrange family also likes to fund the Conservative Party. Pierre's wife Catherine's latest donation to the Tories was £100,000 given in March, so we can assume they would also prefer lower tax and smaller-state politics to make Britain more like the US. And like many billionaire philanthropists, LaGrange's business practices are sometimes less civic minded.

LaGrange's firm GLG attracted criticism when it "shorted" Bradford & Bingley during the financial crisis, betting on the bank's failure.

This was perfectly legal, but GLG's earlier short-selling of Japanese bank SMFG was not. This deal was made by one of GLG's most senior traders on the basis of "insider dealing" information. LaGrange's firm was fined £750,000 by the Financial Services Authority as a result.

Another supporter of the Standard fund Crispin Odey has pledged a "five-figure sum" for the newspaper's charity.

Assuming Odey is promising to give £100,000 or so, this is only a faint echo of US-style philanthropy. But Odey also makes some of the ugly mood music associated with US-style charity.

He wants to give what for him is a little small change, but he rages against society's demands for reasonable rates of taxation.

Crispin runs hedge fund Odey Asset Management. When the government looked at a 50 per cent tax rate for the super-rich, and at regulations to stop hedge funds destabilising the economy, Odey announced his firm was "seriously considering leaving" Britain.

While he was thinking about packing his bags, he also decided to spread some cash around to encourage don't-tax-the-rich politicians.

Odey has given the Tories around £163,000. He also provided the bulk of funds for the Christian Party.

According to its own publicity, the Christian Party is a "faith-based conservative party that believes in small government, greater neighbourly responsibility and low taxes in an economy driven by thrift and enterprise."

The party asked itself what Jesus would do and concluded the son of God would "sell off state-owned hospitals and health-care facilities to private-sector health-care providers." Odey's £25,000 donation to the Christian Party was one of his less successful investments. The party tries to get votes on the back of a conservative, anti-gay morality - a stance somewhat undermined by the fact that its leader Reverend George Hargreaves is the songwriter behind Sinnitta's gay-friendly hit disco records So Macho and Cruising. The mix of Rev Hargreave's disco morality and Odey's money resulted in failure at the ballot box, as the Christian Party got negligible votes in recent elections.

Odey's promise of public-minded charity also contrasts with his unhelpful business practices.

He is married to Nichola Pease, and both were intimately involved in the financial crisis. Odey's firm short-sold banking stocks, placing bets on the failure of HBOS and Bradford & Bingley. Meanwhile Pease was a director of Northern Rock until its collapse.

What the big givers in the US and their smaller cousins in Britain show is this - society should decide its own needs.

The rise of democracy is associated with the rise of progressive taxation and welfare spending for good reasons. Going back to waiting on the whims of the super-rich means returning to the 19th century. There is no future in it.

Dancing to the corporation's tune

Suggestions that Alan Milburn's decision to become David Cameron's adviser betrays his role as a Labour MP are quite unfair - they judge Milburn by the wrong standard.

He is actually a corporate adviser with a minor sideline in being an MP. Milburn earns more from PepsiCo, Lloyds Pharmacy and private equity firm Bridgepoint Capital than he does as an MP. He is paid £90,000 by these companies, but only £65,000 by Parliament.

These companies need Milburn to be friendly with the new government. He can't afford principles with three corporations to support.

PepsiCo needs to know if the government will take health-related stands on its fizzy drinks and Walkers crisps.

Lloyds Pharmacy needs to know how the government will throw it NHS work. And last month Bridgepoint bought private health firm Care UK for £414 million.

Milburn's company said it wanted Care UK because of "favourable trends in health-care outsourcing." The most favourable trend is the arrival of a Conservative health secretary determined to hand over more NHS work to private firms.

Thanks to Milburn's new job advising Cameron, Bridgepoint has more friends in high places to advise it on its NHS work.